CIGNA'S NET INCOME DROPS

MICHAEL REMEZ; Courant Staff WriterTHE HARTFORD COURANT

CIGNA Corp. Monday reported that net profits for the second quarter were down about $45 million, compared with the same quarter in 1991, primarily because of losses in its property and casualty operations.

Net income was $125 million, or $1.74 a share, for the three months ended June 30, compared with $170 million, or $2.38 cents a share, a year ago.

The property and casualty operations reported losses of $18 million, including after-tax reinvestment gains of $26 million. That is compared with income of $42 million for the same period in 1991, which included after-tax investment gains of $21 million.

In a prepared statement, Wilson H. Taylor, CIGNA's chairman and chief executive officer, said the company's employee benefits, pension and life operations performed well in the second quarter.

Before taxes, the catastrophe losses totaled $55 million for the quarter. That included $39 million from the riots.

Taylor said the company also took restructuring steps during the second quarter.

Michael J. Monroe, vice president for corporate relations, said the restructuring costs amount to about $11 million -- after taxes -- in the employee benefit division and another $10 million -- also after taxes -- at CIGNA Worldwide, one of CIGNA's international operations.

"We have been repositioning the business for the past two years," Monroe said of CIGNA Worldwide. "It is reducing the size of its fire portfolio, which has been a very competitive business in which pricing has been and continues to be a real concern. They are trying to redeploy resources to grow in more profitable businesses -- accident and health, marine and casualty lines."

Also on the international front, CIGNA announced that it is starting an extensive review of the company's exposure through its

London property and casualty reinsurance operations. The review is not expected to be completed until later this year, and Taylor said the company cannot yet estimate its effect.

James Ramenda, managing director of Northington Partners in Avon, said that process merits watching.

"It's worth keeping an eye on because the London market is in tough shape," he said.

Ramenda said worldwide property casualty markets have been weak, adding that CIGNA has a bigger stake in those markets that many of its competitors.

The company had projected weaker earnings for the second quarter.

"The bottom line is that it is pretty much in line with expectations and consistent with the pricing weakness in the property casualty industry," Ramenda said of the report.

CIGNA's Employee Life and Health Benefits posted income of $94 million, compared with $92 million for the same quarter in 1991. Employee Retirement and Savings Benefits reported income of $38 million, down from $41 million in income a year ago.

Individual Financial Services reported income of $22 million, up from $19 reported for the same period in 1991. Losses reported for other operations -- which include investment and real estate subsidiaries and other items -- were $11 million, less than half of the $24 million in losses reported in the category one year ago.

During the second quarter, CIGNA added $13 million to real estate reserves and write-downs, increasing that fund from $166 million in the first quarter to $179 million.

CIGNA reported reserves for problem mortgage loans at $180 million, down $1 million from the first period. Reserves for problem bonds increased from $149 million in the first quarter to $155 million in the second.

CIGNA's total revenues were $4.65 billion for the second quarter, down from $4.75 billion a year ago. Assets at the end of the second quarter were $67.5 billion, up from $66.7 billion at the end of 1991